Currently, oily wastewater collected in a shipboard holding tank is processed within a non-chemical, parallel-plate type of oil/water separator for removal of oil from such wastewater prior to its overboard discharge. Such processing of oily wastewater has recently become less effective because of the presence of detergents in the wastewater. Also, more stringent requirements of environmental regulations often exceed the oil reducing capabilities of the aforesaid non-chemical type of wastewater processing systems. It is therefore an important object of the present invention to provide for increased reduction in oil content of the non-chemically processed oily wastewater, despite contamination thereof and without excessive space-occupying equipment, which is of particular concern for shipboard installations.